Munich Re said it has acquired Next Å˽ðÁ«´«Ã½Ó³», which will become part of the reinsurer’s major primary insurance business, Ergo.
The agreement in place values Next Å˽ðÁ«´«Ã½Ó³» at $2.6 billion. Ergo already owned nearly 30% of the digital insurance company’s shares. Munich Re was an early investor in Next Å˽ðÁ«´«Ã½Ó³».
Closing is expected during the third quarter pending regulatory approvals.
“Together with Next Å˽ðÁ«´«Ã½Ó³», we will tap into a highly attractive market overseas, unlocking significant growth opportunities while further diversifying our existing business portfolio,” said Markus Rieß, chief executive officer of Düsseldorf, Germany-based Ergo, in a statement. “At the same time, we will work with Next Å˽ðÁ«´«Ã½Ó³» to leverage their cutting-edge technology and our technical excellence, contributing to our commitment to sustainable, profitable growth.”
Munich Re has said it expects $23.1 billion in general insurance revenue from Ergo in 2025.
Next Å˽ðÁ«´«Ã½Ó³» is expected to contribute mid triple-digit million dollar earnings to Ergo’s net result in the medium term, according to the statement. The companies said small businesses make up 44% of the US GDP but 75% are underinsured. The market is estimated to be $175 million, they said.
Insurtech Next has about 700 employees and serves 600,000 customers — small businesses — using a proprietary technology stack and digital underwriting platform to provide coverage including general liability, business owners policies, and workers’ compensation.
Guy Goldstein, CEO of Palo Alto, California-based Next, said the transaction will allow the company to “scale our technology-driven approach and empower even more small business owners with innovative insurance solutions.”
“With the strength and expertise of Ergo and Munich Re and their well-recognized re/insurance know-how, we are poised to lead the charge in reimagining small business insurance in the U.S.,” he added in a statement.
Topics Trends USA Commercial Lines Business Å˽ðÁ«´«Ã½Ó³» New Markets Market
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